Wednesday, 20 November 2013

We're doing pretty well, according to the OECD

The OECD's just released its latest Economic Outlook, which you can read online for free here.

We've scrubbed up pretty well. If you like the numbers, here they are (courtesy of the blogger's invaluable friend, the Windows Snipping Tool). Personally I think their unemployment rate forecasts are a bit too cautious, but quibbles aside we're looking at a couple of good years ahead.

There's not a lot of advice for us, either (not that these Outlook updates tend to carry a lot for the smaller OECD economies). Keep up the good work on getting the fiscal accounts in order, monetary tightening should begin soon (we know, every forecaster and his dog has the Reserve Bank raising the cash rate in the first half of next year), and don't let house prices get any further out of hand (we know that, too).

Especially (as you can see if you navigate to Table A1a on p70 of the online document - it's too big to reproduce in full here), which shows that we are one of the four countries with the largest increase in real house prices since the start of 2000. In fact, by a small margin we've got the highest increase (+87.6%), just ahead of Canada (+86.5%), Norway (+85.7%) and Australia (+79.4%).

The other thing that's a bit disquieting from Table A1a is that we've also had the third largest rise in relative unit labour costs over the same period (again our comrades on this one are Norway, Australia and Canada). I'm sure that most if not all of the deterioration in relative competitiveness is down to a higher exchange rate, and isn't down to runaway domestic costs (our latest labour costs index, for example, showed only a modest increase). But in any event exporters are going to find exporting somewhat of a struggle until the Kiwi dollar gets down to more comfortable levels.

No comments:

Post a Comment

Welcome to my economics blog

“The remarkable thing about economics is that once you've been exposed to the big ideas, they begin to show up everywhere … Economics offers insight into wealth, poverty, gender relations, the environment, discrimination, politics...How could that possibly not be interesting?” - Charles Wheelan, Naked Economics: Undressing the Dismal Science, 2002

"The soundest argument for markets ... is simply that, very frequently, they are the least bad of the alternatives. To paraphrase Winston Churchill's remark on democracy, markets are the worst form of resource allocation, except for all the others that have been tried" - Prof George Yarrow, Three Lectures on Privatization, Jagiellonian University, Krakow, April 1990

"And if there's one thing we've learned about flawed markets, it's that people flee from them, either physically or by resorting to back channels and black markets. Either way, flawed markets can undermine not just communities but whole nations" - Alvin Roth, Who Gets What - and Why, 2015

"Economic controversy is generally a thankless task. You cannot hope to make any impression on your opponent. Yet he is the only reader on whose interest you can count" - Francis Ysidro Edgeworth, Economic Journal, 1898

"There is some evil genius which sits at the elbow of every economist, forcing him into all sorts of contorted and unnecessary complications" - John Maynard Keynes, letter to Roy Harrod, August 1935

"We are here and it is now. The way I see it is, after that, everything tends towards guesswork" - the philosopher Didactylos, in Terry Pratchett's Small Gods, 1992

"I have never yet seen any plan which has not been mended by the observations of those who were much inferior in understanding to the person who took the lead in the business" - the blogger's creed, as foreshadowed by Edmund Burke, Reflections on the Revolution in France, 1790

"They acted as their situation naturally directed, and they who have clamoured the loudest against them would probably not have acted better themselves" - advice to Twitterati, as foreshadowed by Adam Smith, An Inquiry Into The Nature and Causes of the Wealth of Nations, Book IV, 1776